Poor market conditions force Alaska Housing to postpone sale; Harris County, Texas brings $330 million

By Cristal Cody and Sheri Kasprzak

New York, Aug. 7 - Market conditions made it difficult for at least one issuer Thursday, forcing the Alaska Housing Finance Corp. to put off its planned sale of $80.88 million series 2008B home mortgage revenue bonds, a source with the issuer told Prospect News.

The source pointed to poor market conditions linked to a glut of mortgage revenue securities.

"The spreads just weren't where we wanted them or thought they should be," the source said. "From an economic standpoint, it wasn't a good move and since we didn't have to do it, we just pulled it and will wait until supplies lesson and hopefully spreads go back to normal. We can wait a month or two."

About $500 of million mortgage bonds are expected to be sold in several states including New York and California under the new housing legislation.

Alaska Housing Finance plans to use the proceeds to purchase first-time buyer home mortgage loans.

Harris County prices bonds

In other pricing news Thursday, Harris County of Texas priced $330 million refunding bonds on Thursday, but terms were not immediately available.

The sale included $130 million series 2008B, $100 million series 2008C and $100 million series 2008D permanent improvement refunding bonds.

Loop Capital Markets LLC was the senior manager of the negotiated sale.

Proceeds will be used to defease the county's series A1, B and D general obligation commercial paper notes.

Ohio Housing sale

Also on Thursday, the Ohio Housing Finance Agency had intended to sell $150 million in residential mortgage revenue bonds, but the terms were not immediately available, a source at the issuer said. The final terms may be available later this week.

The sale included $85 million in series 2008F fixed-rate bonds, due 2009 to 2018 with term bonds due 2028, 2033 and 2039; $13.75 million in series 2008G fixed-rate term bonds due 2023; $13.75 million in series 2008H variable-rate bonds due 2039; and $37.5 million in series 2008I variable-rate bonds due 2039.

Proceeds will be used for new mortgage loans to qualified low- and moderate-income applicants and to refund outstanding bonds.

Elsewhere, the School Building Authority of West Virginia had been expected to price $100 million in series 2008 excess lottery revenue bonds on Thursday, but calls to the issuer for the deal terms were not immediately returned.

Merrill Lynch was the lead manager for the offering and proceeds will be used to finance school construction and renovations.

Additional sales

Other pricing action on Thursday included a planned sale from Blount County and the Blount County Public Building Authority in Tennessee.

The $127.4 million series E5A local government public improvement bonds (A1//) were sold in a negotiated sale managed by Morgan Keegan & Co.

Proceeds will restructure the county's outstanding $40 million series A3A, $55.58 million series C2A, $6.93 million series B1C, $10 million series B4A and $14 million series D1B bonds.

Johns Hopkins University also expected to price $125.855 million variable-rate revenue bonds on Thursday.

The series 2008B bonds (Aa2) were sold through the Maryland Health and Higher Educational Facilities Authority.

Morgan Stanley managed the negotiated sale.

Proceeds will be used to refund a portion of the outstanding series 1997 and 1998 fixed-rate bonds.

Upper Chesapeake Health System was expected to sell $60.19 million series 2008B bonds variable-rate revenue bonds, but calls to confirm the sale were not immediately returned.

The bonds (Aaa//) were sold through the Maryland Health and Higher Educational Facilities Authority.

Upper Chesapeake Health also plans to sell $63.91 million series 2008A bonds on Friday.

Banc of America Securities LLC and Branch Banking and Trust are the book runners for both sales.

Puerto Rico housing bonds

Earlier this month, the Puerto Rico Housing Finance Authority priced $484.475 million bonds in two sales, according to official statements.

The authority sold $384.475 million capital fund modernization program subordinate bonds (/AA-/A+) with 3% to 5.5% coupons to yield 1.94% to 5.33% for Puerto Rico Public Housing Projects.

The bonds have serial maturities from Dec. 1, 2008 through Dec. 1, 2020 and terms due 2027.

The authority also sold $100 million housing revenue bonds (/BBB/) for the Vivienda Modernization 1 LLC project.

The series 2008 bonds priced with a 4.75% coupon to yield 5%.

The bonds are due Oct. 1, 2011.

JPMorgan was the senior manager of the negotiated sales.

Proceeds from both series will be used to purchase 33 public housing projects and rehabilitate the properties for public housing.

Indiana Finance sale planned

Moving to new offerings, the Indiana Finance Authority plans to price $288.51 million revenue refunding bonds for the Sisters of St. Francis Health Services, according to a preliminary official statement.

The series 2008C bonds (Aa3//AA) have serial maturities from 2009 through 2028 and terms due 2033 and 2036.

Citigroup Global Markets is the senior manager of the negotiated sale and Merrill Lynch & Co. is the co-manager.

Proceeds will be used to refund the series 2006A and series 2006B revenue refunding bonds.

Maryland DOT bonds coming up

In other sales, the Maryland Department of Transportation plans to price $280 million in series 2008 consolidated transportation bonds on Aug. 20, said a preliminary official statement released Thursday.

The bonds will be sold on a competitive basis and are due from 2011 to 2023.

Proceeds will be used for capital improvements under the department's Consolidated Transportation Program, which provides comprehensive planning and coordinating for the state's highway, transit, port and aviation activities.

Milwaukee bond sale

In other planned offerings, the city of Milwaukee intends to sell $210 million in series 2008M10 school revenue anticipation notes, said a sell-sider connected to the deal.

The bonds (MIG 1//F1+), which are due Sept. 3, 2009, will be sold on a competitive basis on Aug. 12.

Proceeds will be used to assist the city's public schools by providing funds until state and property tax revenues are received.

Pennsylvania Housing deal

Coming up, the Pennsylvania Housing Finance Agency expects to price its previously announced $183.09 million series 2008-103 single family mortgage revenue bonds on Aug. 14, a source said Thursday.

The bonds will price in three tranches, including the $14.955 million series 2008-103A bonds with serial maturities from 2014 through 2018 and a term due 2022 and the $2.635 million series 2008-103B bonds due in 2009 and 2010.

The $165.5 million series 2008-103C bonds have serial maturities from 2010 through 2018 and terms due 2023, 2028, 2033 and 2038.

Goldman, Sachs & Co. is the senior manager of the negotiated sale.

Proceeds will be used to refund outstanding single family mortgage revenue bonds and to purchase mortgage loans.

Also, Fairfield University expects to price $112 million revenue bonds through the Connecticut Health and Educational Facilities Authority on Aug. 13, a source said Thursday.

The series N bonds (A3/A-/) will be sold in a negotiated sale through senior manager JPMorgan.

Proceeds will be used to refund the $105.9 million outstanding from the series L1 and L2 revenue bonds and fund a swap termination payment and a deposit to the debt service reserve fund.

Thomas Jefferson School of Law

Also on the horizon are $129.93 million of revenue bonds from the Thomas Jefferson School of Law, according to a preliminary limited offering memorandum released Thursday.

The $95.685 million series 2008A term bonds are due 2038 and the $34.245 million series 2008B bonds are due 2023.

The bonds will price through the California Statewide Communities Development Authority in a negotiated sale managed by Merrill Lynch & Co.

Proceeds will be used to acquire, construct and equip a multi-story building with underground parking in San Diego for the new law school campus and to refund a portion of the outstanding $30.8 million series 2007 taxable notes

Kansas City offering ahead

Also coming up, Kansas City, Mo. has a $102.555 million sale planned of variable-rate demand special obligation refunding bonds on Aug. 13, said a calendar of upcoming sales.

The deal includes $81.4 million in series 2008E bonds (Aaa/VMIG 1//AA-/F1+) and $21.155 million in series 2008F bonds (Aaa/VMIG 1//AA+/F1+).

The bonds will be sold on a negotiated basis with Citigroup Global Markets as the senior manager.

Interest will initially be at the weekly rate.

Proceeds will be used to refund the city's series 2004A and series 2005 revenue bonds.

Lucile Salter Packard Children's Hospital at Stanford

The Lucile Salter Packard Children's Hospital at Stanford intends to price $93.495 million variable-rate refunding revenue bonds through the California Health Facilities Financing Authority, according to a preliminary official statement.

The $30.355 million series 2008A and $30.355 million series 2008B bonds are due 2033. The $32.785 million series 2008C bonds are due 2023.

The bonds will price initially with a weekly interest rate.

Morgan Stanley will manage the negotiated sale of the series 2008B and series 2008C bonds. Goldman, Sachs & Co. will manage the sale of the series 2008A bonds.

Proceeds will be used to refund the series 2003A and series 2003B revenue bonds and repay a bank loan used in July to retire the $32.4 million outstanding from the series 1993 certificates of participation.

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